UDK: Projected $279 million Kansas budget shortfall could have implications for higher education

Allison KiteNovember 12, 2014

Higher education is one part of the state budget facing potential cuts because of a $279 million shortfall.

The November consensus revenue estimate, which is created by legislative researchers and university economists, indicates a $279 million gap between projected revenues and approved expenditures in the Kansas budget. This gap has to be made up by June 30 because the state is constitutionally prohibited from ending the fiscal year with a deficit.

Annie McKay, executive director of Kansas Center for Economic Growth, said she believes this will be the primary issue dealt with in the upcoming legislative session. Options to make up the money could include transfers of money out of highway department reserves, budget cuts and seizing of other efficiencies or savings of state departments.

“To absorb those reductions mid-year is really challenging,” McKay said. “They have contracts in place. They have personnel. They have wages they have to pay. They have benefits. They have to keep the lights on.”

Dave Trabert, president of the Kansas Policy Institute said the highway department and other departments have unnecessary excess cash reserves that could be dipped into to fill up the hole. He went on to say that if departments statewide were to operate more efficiently, the gap could be filled easily.

“The plan has always been laid out there that it can be done without reducing services or a tax increase,” he said. “We just have to make better use of the resources we already have.

However, Duane Goossen, former budget director for the state, said dipping into cash reserves would be only a temporary fix. He said the real solution is to reverse tax cuts implemented in 2012 and 2013.

“Another possibility that might be used would be to take money from the state highway fund,” he said. “That might be a solution—a temporary solution—for this year, but that doesn’t fix things next year.”